[PDF] Letter to Shareholders We continue to make Pinterest

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Letter to Shareholders

Q2 2022

Stephanie, a mom and grandmom from Aubrey, Texas

has been a Pinner for the past ~10 years, and has used Pinterest as inspo for all of life's moments. "I pin things when I want to collect inspiration," Stephanie says, "but I also pin things for a vision board, because I want to see it come to life one day." In fact, Stephanie helped bring her daughter's dream wedding to life using Pinterest. Whether it be finding the perfect shade of silk flowers or just the right table setting, Stephanie used Pinterest to find - and buy - exactly what she was looking for. Sourcing items from small businesses was really important to Stephanie. "It's really important to give them the support they need. There's a lot of good quality items on Pinterest from small businesses, so I go out of my way to purchase from them."

Inspired on Pinterest

Some of Stephanie's boards:

→Instapot Recipes →Nail Ideas →Wedding Inspo →Healthy Living →Dinner Party

Recipes

"Pinterest is where I find the inspiration that I can't get from other platforms. I go on Pinterest when I can't verbally describe what I'm looking for, and I love that I can find, and then buy, things I like."

Stephanie P.

smpeterson80

Aubrey, Texas

United States

03

A Letter From

Our New CEO

Dear Shareholders,

I want to start by offering my gratitude to Ben and the Pinterest Board of Directors for giving me the opportunity to lead Pinterest. I have long admired what the Pinterest brand and platform stand for, and believe there is no better time to join this incredible company. Today there are 433 million users around the world who come to Pinterest each month to find a positive place online where they can find inspiration for so many parts of their lives. Given our strong foundation and the significant opportunities still ahead, I am confident Pinterest will usher in a new chapter of growth and success. Having spent the majority of my career building and leading commerce and financial technology businesses from startups to large organizations, it's clear to me that Pinterest is a very unique platform, having both inspiration and strong intent in the same experience. As we work to make it easier for users to act upon that inspiration and intent, we plan to make Pinterest an even more attractive forum for advertisers and content creators to engage with hundreds of millions of users while helping people accomplish their daily goals of making, doing and buying. In my first few weeks, I've been listening closely to stakeholders - including investors, employees, users, advertisers and creators. From those conversations it is clear that there is shared conviction and optimism for the Pinterest platform and community. It is also clear that the market is evolving rapidly and we must do the same. The team and I are focused on developing and executing against a long-term plan to help Pinners engage more deeply with all the inspiring products and services they find on our platform so they can build their best lives. At the same time, as the market adapts, we will as well. That includes meeting the moment to help users and advertisers navigate shifting needs as well as balancing growth with profitability in our own business. We're passionate about our mission to bring everyone the inspiration to create a life they love and look forward to sharing more on how we will position Pinterest as a go-to platform for inspiration-to-realization in the months to come.

Sincerely,

Bill Ready

04

Revenue

$666 million

9% Y/Y

MAUs

433 million

(5%) Y/Y ARPU $1.54

17% Y/Y

Net Loss

$43 million (6%) of revenue

Adj. EBITDA

$92 million

14% of revenue

Q222 Highlights

Q2 revenue grew 9% year over year, and 16% quarter over quarter to $666million. Strength came from large retailers, and our international business, which was partially offset by weakness due to macroeconomic uncertainty. Global Monthly Active Users (MAUs) of 433 million were flat quarter over quarter, and down 5% year over year. GAAP net loss was $43 million for Q2, compared to GAAP net income of $69 million in the year ago quarter. Our Adjusted EBITDA was $92 million for Q2.

Q222 Business

Highlights

The Pinner is the focal point of what we do. To that end, we are intent on innovating across our platform to build a positive place that helps our users find inspiration, organize and plan for the future, as well as discover goods and services to turn that inspiration into reality. In Q2, 433 million global monthly active users came to Pinterest, similar to Q1 levels. We continue to improve the heart of our user experience. These investments include:

1) Advances in machine learning and artificial intelligence systems that drove

significant improvement in the relevance of home feed recommendations.

2) Focus on growing our native content ecosystem through the expansion of our

creation tools to more Pinners and through content partnerships.

3) Diversification of growth channels outside of search engine optimization (SEO)

including more personalized notifications and sharing Idea Pin content on third- party platforms. We believe that these other channels, over time, can become important sources of traffic for new and resurrected users on Pinterest. Finally, Pinterest is committed to providing a positive and inclusive place online. In June we launched Compassionate Search to 11 new countries, allowing Pinners to access emotional well-being activities they can do right from the Pinterest app. We expanded hair pattern search for people of diverse backgrounds to new international markets in the quarter. Finally, we're partnering with organizations like the Mental Health Coalition in the U.S., to amplify informative and inspiring content on our platform. This non-GAAP financial measure excludes share-based compensation (SBC), depreciation and

amortization expense, interest income, interest expense and other income (expense), net, provision for

(benefit from) income taxes and non-cash charitable contributions. For more information on this, please see

"About non-GAAP financial measures."

Pinner Experience

05

Inspiration & Content

We believe that inspirational content is an important on-ramp to much of the engagement that happens on Pinterest. We began investing in a native content ecosystem with an initial emphasis on video, which is a fundamental medium for inspiration and planning and an important avenue to drive more commerce, engagement and action on our platform. Q2 marked another period of progress growing this ecosystem. →As we increase the supply of native content, our machine learning systems are getting better at serving personalized recommendations. As a result, the relevance of Idea Pins on the home feed has improved significantly quarter over quarter. →We signed a global, multi-year partnership with Tastemade to bring high quality video across our core and emerging verticals. Tastemade will create Idea Pins, new shows for Pinterest, and stream hundreds of hours of new live programming for Pinterest TV from Tastemade's studios. →We launched Idea Ads and the paid partnership tool, which were previously in beta. Idea Ads are immersive, multi-page video ads designed to show ideas in action. Through the new paid partnership tool, creators can tag brand partners directly in their content. When creators share ideas about brands, people can get inspired to act on them, driving awareness and sales for those brands.

Shopping

We continue to make Pinterest the home for personalized, taste-driven shopping. Since 2019, we've amassed over one billion catalog items by adding merchant partners, making it easier for merchants to upload their products, and driving gross merchandise value (GMV) for businesses. Our investments in the Pinterest API for Shopping enables merchants to more easily upload and manage a product feed, and update merchants' metadata, such as price and availability, in real time. We are making progress with the beta test of Your Shop, a customized shopping page powered by our taste-driven algorithm informed by

Pinners' unique preferences and styles.

Finally, we acquired The Yes Platform, Inc. ("The Yes"), a commerce platform for fashion. The Yes team joined Pinterest's Shopping team, bringing their unique AI- based commerce technology in fashion and years of collective shopping experience, which we believe will make Pinterest a compelling shopping destination.

Pinterest for Business

The macroeconomic environment has created meaningful uncertainty for our advertiser partners. We believe that providing measurable returns is fundamental to delivering value to advertisers and, in the long term, will help drive incremental sales. In addition, our unique insights into consumer behavior prompt many advertisers to turn to our platform. We are focused on delivering advertiser value across these key areas. 06

Measurable Returns for Advertisers

We are investing across our advertising platform to help businesses reach their goals on Pinterest. In June, we launched Idea Ads in 34 markets, offering advertisers a creative new ad format to turn inspiration into realization. In July, we expanded the available use cases of our Pinterest API v.5 by releasing ad management campaign features. We plan to continue building on the API functionality for advertisers throughout the year. We also expanded our measurement offering, launching our improved modeled conversions product in Q2. By automatically integrating modeled conversions into our first-party reporting and measurement solutions, we expect to continue providing a comprehensive view of campaign reporting for our advertisers. Finally, we've expanded our ad offering to more countries. In Q2, we launched ads in Japan and in July we expanded our Latin America presence to Chile, Argentina and Colombia.

Driving Sales

We continue to expand our shopping capabilities for merchants and advertisers. In Q2, our shopping ads revenue grew at double the rate compared to overall revenue year over year. And we're focused on streamlining the functionality for advertisers to use our shopping features. First, our advertisers in all shopping markets can now leverage t he Pinterest API for Shopping to manage their inventory and update product availability and price in real-time. Second, we introduced product group suggestions so merchants can easily add or remove groups for their shopping campaigns or brand storefront. This reduces the friction for merchants to scale their presence.

Scotch™ Brand

Scotch™ Brand launched a campaign with

Pinterest to inspire parents to take a hands-on

approach to back-to-school shopping. Tapping the new idea ads format, Scotch™ Brand showed how to DIY school supplies like pencil holders, bookmarks, teacher's gifts and more, through a series of engaging videos made in partnership with

Kailo Chic,

a Pinterest

Creator popular for kid-friendly craft content.

As a part of the campaign, Scotch™ turned

to Pinterest Trends to find popular search terms that could inform their creative strategy.

They found that terms like "preschooler

crafts" and "back-to-school crafts" were commonly searched phrases, and used those insights to fuel their campaign. The results? A 64% lower cost per impression vs goal, and a CTR 4x higher than benchmark. "Working with a Pinterest creator helped us reach our audience organically. And then

Pinterest trends helped us unlock

emerging insights that we used to make sure our content was actually providing something they wanted - back-to-school crafts."

Nathan Trimbach,

Global Social Media Lead, Scotch™ Brand

07

Q222 Financial

Highlights

Q2 revenue grew 9% year over year to $666 million, and 16% quarter over quarter to $666million. Strength came from large retail advertisers and our international business, which was partially offset by weakness due to macroeconomic uncertainty. Our global Monthly Active Users (MAUs) were flat quarter over quarter and decreased 5% year over year to 433 million. The year-over-year decline was due to a combination of factors, some of which are easier to quantify than others, such as lower traffic from search engines and the lingering impact from the pandemic unwind in the year-ago quarter. Other factors, including competition for time spent on competing platforms, also remained a headwind. Our Q2 GAAP net loss was $43 million or (6)% of revenue. Non-GAAP net income was $77 million and our Adjusted EBITDA was $92 million or 14% of revenue. 454
123
231
117
223
10092

Q221Q222

Monthly Active Users

(in millions)

Europe

U.S. & CanadaRest of World

433

Users & Engagement

Global MAUs at quarter-end were 433 million. While our global MAUs were flat quarter over quarter, we recognize there is work to be done to grow, particularly in our more mature user base in the U.S. & Canada and Europe regions. On a year-over-year basis, global MAUs declined 5%. This was due to a combination of factors, some of which are easier to quantify than others, such as: lower traffic from search (largely driven by Google's algorithm update in November 2021) that have resulted in reduced new user traffic and resurrections; and the lingering impact from the pandemic unwind, particularly outside the U.S., which impacted our engagement as many countries started to open up in the year ago quarter. Other factors, such as the impact of competition for share of time spent from video-centric platforms, particularly in our more mature markets, also remained a headwind. We note that global year-over-year declines were most pronounced for our web users. While global MAUs declined year over year, our global mobile app MAUs grew high-single digits, accelerating off of Q1, and U.S. & Canada mobile app MAUs declined 2% year over year, an improvement from the year-over-year rate of decline we experienced in Q1. We saw continued strength within the younger demographic, with global Gen Z users growing low-double digits year over year.

By region:

→U.S. & Canada MAUs were 92 million, a decrease of 8% year over year in comparison to 100 million in the same period of the previous year. →Europe MAUs were 117 million, a decrease of 4% year over year in comparison to 123 million in the same period of the previous year. →Rest of World MAUs were 223 million, a decrease of 3% year over year in comparison to 231 million in the same period of the previous year.

This non-GAAP financial measure excludes SBC, amortization of acquired intangible assets and non-cash

charitable contributions. For more information on this, please see "About non-GAAP financial measures."

Providing Unique Insights

People use Pinterest to plan for the future. So while across the industry, most focus on what has trended, Pinterest trends are predictive. In Q2, we launched a beta of our Pinterest Trends tool. The new tool supports trends in 22 new countries, and is designed to help advertisers, agencies, and creators. Advertisers and agencies can organize trends by the audiences that matter most to them to build more relevant, resonant campaigns. We believe the Pinterest Trends tool is particularly useful for advertisers facing macroeconomic volatility by helping them predict future consumer demand, and enabling them to allocate budgets accordingly. 08

³ Revenue is geographically apportioned based on our estimate of the geographic location of our users when

they perform a revenue-generating activity. U.S. and Canada, Europe and Rest of World may not sum to

Global due to rounding. This allocation differs from our disclosure of revenue disaggregated by geography in

the notes to our condensed consolidated financial statements where revenue is geographically apportioned

based on our customers' billing addresses.

Revenue

(in millions) Q221 $613

Q222$666

$92 $13 $102 $22 $542 $508 Total revenue was $666 million, an increase of 9% year over year compared to Q2

2021. Adjusting for foreign exchange headwinds, total revenue grew 10%. Strength

came from our large retailers (namely online and specialty retailers), and our international business. This strength was partially offset by lower than expected demand from U.S. big box retailers and mid-market advertisers, who pulled back ad spend due to concerns about weakening consumer demand. Our CPG advertisers also continued to face challenges due to supply chain issues and inflationary pressures.

By region

3 Total U.S. and Canada revenue was $542 million, an increase of 7% year over year. U.S. and Canada revenue increases were driven by ARPU. Total Europe revenue was $102 million, an increase of 10% year over year. Europe revenue increases were driven by ARPU. Adjusting for foreign exchange headwinds, growth in revenue from Europe would have been 22%. Total Rest of World revenue was $22 million, an increase of 71% year over year. Rest of World revenue increases were driven by ARPU.

Europe

U.S. & CanadaRest of World

Revenue

1.321.544.87

5.82 .72 .06.86.10

Q221, 22Q221, 22Q221, 22Q221, 22

Average revenue per user (in $)

ARPU Global ARPU grew 17% year over year to $1.54, compared to $1.32 in Q2 2021. The ARPU expansion was driven primarily by advertising demand and thequotesdbs_dbs19.pdfusesText_25

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